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ACCA Applied Skills · Taxation (UK) · The use of exemptions and reliefs in deferring and minimising tax liabilities arising on the disposal of capital assets

Which one of the following gifts by an individual can qualify for gift holdover relief?

A gift of a factory building used in the donor's sole trade can qualify. Gift holdover relief applies to business assets, such as those used in a trade. Quoted shares in a non-personal company and private assets do not qualify as business assets.

  1. AA gift of quoted shares in a listed company to a friend, where the donor owned 1% of the company and it is not her personal company
  2. BA gift of a motor car to a daughter
  3. CA gift of a trading business's factory building, used in the donor's sole trade, to his sonCorrect
  4. DA gift of a main residence to a brother, where the donor lived in it throughout ownership

Explanation

Gift holdover relief is available for gifts of business assets, such as assets used in the donor's trade, and for gifts that are immediately chargeable to inheritance tax. A factory used in the donor's sole trade qualifies. A private car is an exempt chattel, quoted shares in a non-personal company do not qualify as business assets, and a main residence is covered by private residence relief.

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